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Europe and Asia fuel Temenos earnings rise

Banking software vendor Temenos has reported total software licensing growth of 21% and earnings growth of 20% in its full year 2016 results.

The vendor is in a vivacious mood, saying it saw growth across all geographies, with Europe and Asia “particularly strong”. Non-IFRS total software licensing revenues in FY 16 were $256.2 million. Total revenues stood at $635.1 million; while non-IFRS EBIT increased to $186.5 million.

Temenos CEO David Arnott says 2016 was “another outstanding year for Temenos, coming off the back of a record 2015” and it had “growth across all geographies”. In terms of top-tier banks, he claims the vendor “won all the largest deals in the market”. These include the Bank of Ireland tech overhaul, a wealth management project at Standard Chartered, and a core revamp at Banque Internationale à Luxembourg (BIL).

In the US, the firm says it has “momentum and credibility” with its Commerce Bank deal and Ally Financial go-live. However, Temenos is understood to have laid off a number of staff across its operations in the US, including at the Trinovus and Akcelerant subsidiaries.

It is also understood to be eyeing the payments business of DH Corporation, Global Transaction Banking Solution (GTBS, formerly Fundtech). D+H is known to be up for sale, although it is unclear at the moment whether it will be sold as one entity, or by business lines.

In Australia, Temenos will acquire all of Rubik Financial’s shares for $50 million via a scheme of arrangement with the deal expected to close by the end of May 2017.

Looking ahead, Temenos CFO and COO Max Chuard says it continues to expect “strong growth” in 2017, and it is guiding for non-IFRS total software licensing growth of 10% to 15% and non-IFRS total revenue growth of between 7.5% and 11.0%. It also guiding for 2017 with a non-IFRS EBIT of $210 million to $215 million, “which implies a margin” of around 31%.

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